Eddie Van Halen passed away the other day. He was not just a guitarist, he played every instrument, but guitar was his thing. And his brother Alex had his back playing drums, Eddie would not do an interview without mentioning him.
To hear the best of him listen to his solo in “Eruption”, and it’s so wild and fast and so all over the place, you’d think he would get out of key any moment now.
But he never does, just keeps you on the edge listening and that’s art for me.
He was the rocking machine and also a great storyteller.
So, here is my tribute to him - only the good die young.
I am hooked on good songs and the ironic thing is that I don’t listen to music anymore. I don’t really read books anymore either, the library in my house is deadly, but now I am done reading anything new – there is nothing they can tell me I don’t already know.
I subscribe to a news portal that insists that the next financial stimulus will consist of all citizens writing checks to the governments, $1250 in America.
That’s a joke.
All these ladies and gentlemen in governments couldn’t resist the extra spending and the central banks are now coming to the rescue because they have no choice.
That’s not a joke.
Money is a mental concept, it is not a real thing if not backed by anything tangible. And to be clear, I see nothing wrong with it.
When the economy was expanding, even exploding like in the internet age, if the money was tied up to something tangible like gold, it would choke all the progress fast. Gold only adds about 2% of stock a year, good part of it going into jewelry, and the economies back then were growing at a multiple of that. This is the problem with “sound money”, delicately called “the gap”.
Between fantasy and reality, my opinion.
The problems start when the governments go to far, like buying stocks and bonds outright in the market (with brokers front-running them), introducing capital controls or extending the maturity of bonds arbitrarily. Italy invented that, I think.
Say, you were holding a 5-year government bond, but the guys in Rome were running light on cash and couldn’t possibly redeem it. So they would tell you that you’re now holding a 30-year bond.
The Swiss National Bank (SNB) stands out as the biggest speculator in the world.
Its balance sheet is over $ 1 trillion, or 136% of Swiss GDP.
The Federal Reserve balance sheet is 35% of US GDP, so to compete with the SNB, the Fed would need to increase its balance sheet from the current $7trillion to $27 trillion.
Basically you can consider SNB a hedge fund and let’s hope the markets will hold (SNB is a major shareholder in companies like Apple, Microsoft, Amazon and Facebook).
What does that have to do with stimulating the Swiss economy may take some explaining to do.
I read that the revenue from covid testing kits is $2 billion per day and at some point the cost of the vaccine will kick in too, helping the revenues even more.
Once the money starts flowing freely, the system has a built in resistance to stop it.
We’re looking at the biggest money making run since the internet bubble of the late 90’s. Replace “run” with “grab” according to your level of sensitivity.
That’s the brothers Van Halen below. Someone once asked Eddie what is the rocking music all about, “sticking it up to the man,” he said.
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Tom Kubiak is the author of The Traveler